Requesting an Exemption from the Mandatory Laws and Procedures in Section 466 of the Act

AT-97-02

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Requesting Exemption from Mandatory Child Support Enforcement Program Laws and Procedures

PROGRAM INSTRUCTION

ACTION TRANSMITTAL

REVISED

OCSE-AT-97-02

February 10, 1997

TO:STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT:Revised Instructions for Requesting an Exemption from the Mandatory Laws and Procedures in Section 466 of the Social Security Act.

BACKGROUND:The State plan provision at section 454(20) of the Social Security Act (the Act) requires States to have in effect and use the laws and procedures specified in section 466 to improve the effectiveness of child support enforcement programs. However, under section 466(d), States may apply for an exemption from implementing one or more of these laws and procedures.

CONTENT:This Action Transmittal establishes revised procedures States must follow when applying for an exemption and supersedes the instructions in OCSE-AT-88-19. The following changes were made to address Federal and State experience with the exemption process and to implement the requirements of section 13721 of the Omnibus Budget Reconciliation Act of 1993 (OBRA'93, Pub. L. 103-66). This includes section 466(a)(2) of the Act which added expedited processes to require use of such processes either under the State judicial system or under the State administrative processes, for establishing paternity, in addition to obtaining and enforcing support orders. In addition, it was revised to be consistent with the new requirements in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), P.L. 104-193.

This document is organized as follows:

I. - Introduction - A list of the mandatory procedures in section 466 of the Act is added to the introduction so that States know which procedures are eligible for exemptions. Editorial and other nonsubstantive changes are made for clarity.

II. - Exemption Process And Material For Submittal

III. - Exemption Categories - This includes instructions regarding the necessary justification and documentation required as part of the application for an exemption and termination of exemptions; and a note on authority exemptions.

IV. - Termination Of Exemption Or Disapproval Of Request For Extension

V. - Certification Of Implementation Of Mandatory Procedures

SUPERSEDED MATERIAL: OCSE-AT-88-19 dated December 22, 1988.

INQUIRIES TO: ACF Regional Administrators

_______________________

David Gray Ross

Deputy Director

Office of Child Support

Enforcement

I. INTRODUCTION

Since the inception of the Federal Child Support Enforcement program, certain laws and procedures have noticeably increased the efficiency and effectiveness of some States' programs. To improve the nationwide child support effort, Congress required States to implement the particular laws and procedures that were responsible for the success of those State programs. Section 466 of the Act currently lists twenty-one categories of required State laws:

(1) Income withholding;

(2) Expedited processes including administrative actions by the State agency, substantive and procedural rules and coordination with ERISA;

(3) State income tax refund offset;

(4) Liens against real and personal property; full faith and credit to such liens;

(5) Procedures concerning paternity establishment;

(6) Posting of security, bonds or other guarantee to secure payment of overdue support;

(7) Reporting arrearages to credit bureaus;

(8) Providing for income withholding in orders;

(9) Requiring that any payment or installment of support is a final judgment by operation of law;

(10) Review and adjustment of child support orders upon request;

(11) Giving of full faith and credit to a determination of paternity made by any other State, whether established by voluntary acknowledgment or administrative or judicial processes;

(12) Locator information from interstate networks;

(13) Recording of social security numbers in certain family matters;

(14) Administrative enforcement in interstate cases;

(15) Procedures to ensure that persons owing past-due support either work or have a plan for payment of such support;

(16) Authority to withhold or suspend licenses;

(17) Financial institution data matches;

(18) Enforcement of orders against paternal or maternal grandparents;

(19) Health care coverage;

(20) Uniform Interstate Family Support Act; and

(21) Laws voiding fraudulent transfer.

If a State can demonstrate to the satisfaction of the Secretary that any one, or all, of the required laws and procedures will not increase the effectiveness and efficiency of the State's child support enforcement program, the Secretary may grant the State an exemption from implementing one or more of the required procedures. Additionally, an exemption is available if a State has and uses a similar procedure which does not fully comply with the mandate, law or procedure and the State shows evidence that implementation of the mandatory procedure would not increase the efficiency and effectiveness of the State's existing procedure. With respect to procedures for expedited processes, a State may apply for an exemption for one or more political subdivisions of the State.

This Action Transmittal addresses requests for exemptions from the requirements of section 466 of the Act only. Please read this material carefully before preparing any requests for exemptions.

II. EXEMPTION PROCESS AND MATERIAL FOR SUBMISSION

A. Process

States must submit an original and one copy of each exemption request to the ACF Regional Office. The Regional Office will review the State's submission and will recommend to the Central Office approval or disapproval of the State's exemption request and, if the request is approved, the length of the exemption period. An exemption, including an extension, may be granted for up to three years.

If further materials are needed before a recommendation can be made, the Regional Office will request them from the State in writing. The State must provide the additional material within two weeks from the date of the Regional Office's letter requesting the additional material. If theState's submission remains incomplete or insufficient to the point that the review cannot proceed, the Regional Office will recommend disapproval of the State's request.

The Deputy Director of OCSE will notify States in writing that exemptions have been approved or disapproved and the basis for the decision. If an exemption is approved, OCSE's approval letter will specify the exemption period. Disapprovals of requests for exemptions are not subject to administrative appeal.

All exemptions are subject to review at any time during the exemption period. If circumstances change, an exemption may be terminated by the Deputy Director of OCSE. (Section IV contains information pertaining to disapproval or termination of an exemption.)

States must apply for an extension of an exemption, or enact and implement the necessary laws and procedures, prior to expiration of the exemption period. If the State applies for an extension, it must submit an original and one copy of each exemption request 90 days before the current exemption period expires. The State's submission for an extension must meet the requirements for an initial exemption request, must address any changes in circumstances from the time of its initial request, especially changes that may affect the efficiency and effectiveness of the State's operation, and must contain documentation, reflecting current data, that support the request.

B.Material for Submission of Requests for Exemptions and Requests For Extensions of Previously Approved Exemptions

1.Cover letter. The State's cover letter must specify the mandatory procedure(s) from which the State is requesting an exemption.

2.Justification and Documentation. A State must submit the justification and documentation addressed under Section III, as appropriate, for each exemption request and for each request for an extension of a previously approved exemption.

III. EXEMPTION CATEGORIES

An exemption authorizes a State not to implement a mandatory procedure or to continue to operate a similar existing procedure which does not comply with all of the requirements in the statute and regulations but contributes to an effective and efficient Child Support Enforcement program. In the final rules issued December 23, 1994 (59 FR 66204) as OCSE-AT-9406, governing paternity establishment and program audit, we revised the definition of expedited process anddeleted the requirement that a presiding officer may not be a judge. This change reduced the necessity for exemptions from expedited processes requirements. As a result, the usual basis for an exemption from expedited processes (to allow use of a judge) is now inapplicable, there should be only limited instances in which an exemption in the expedited processes area is requested or warranted.

States do not need to apply for extensions of existing authority exemptions. As specified in OCSE-AT-85-17, there are two types of "authority exemptions" which relieve a State from the requirement to enact a law in connection with a mandatory procedure: 1) the State already has a law which complies with the requirements of the mandatory procedure, and 2) the State does not have authority to have a State income tax. States may request an authority exemption from State income tax refund offset requirements merely by attesting to the fact that the State does not have a State income tax.

A State must meet different criteria depending upon the type of request.

A. Exemption Not to Implement a Procedure

A State may apply for an exemption from implementing any of the required procedures in section 466(a) of the Act. The State must submit:

Evidence that implementation of a particular procedure would not increase the efficiency and effectiveness of the State's Child Support Enforcement Program.

To meet this criterion, a State must show why implementation of the particular mandated procedure would not be cost effective (estimated collections resulting from the procedure are less than estimated costs) at the end of three years. Data must be provided to show estimated collections from and costs of the procedure for the three years prior to the year of the request for the exemption.

The evidence must include an estimate of:

the developmental costs of implementing the procedure;

the costs of operating the procedure compared to the expected collections as a result of implementing the procedure; and

the staffing needed to operate the procedure.

In addition, the State must compare for a fiscal year period the effectiveness of its current program to the

effectiveness of the program were it to implement the procedure, by responding to the following questions, as appropriate. Would the procedure increase the State's:

ability to process cases, i.e., the average length of time to take an action in a case?

welfare savings by reducing the number of TANF cases?

number of support orders enforced?

collections (inter- and intrastate)?

Statistical Requirements

A State must fully document the request and define the methodology(ies) used to reach its conclusions. The methodology(ies) must be conceptually sound and supported by data that are reliable and representative. Where estimates are used, the State must identify any assumptions made and/or the sampling approach(es) used. In addition, all sampling must be statistically valid, include adequate sample size and take into account sampling error. All inferences should be made at a 95 percent (or greater) level of significance.

B. Exemption to Operate a Similar Existing Procedure

If a State applies for an exemption to operate a similar existing procedure, it must meet the three criteria below.

1. A description of the existing procedure including identification of those parts that conform to the statutory and regulatory requirements and those that do not conform.

To meet this criterion, a State must describe its existing system. The description should address procedures used for the handling and processing of cases. A State may submit guidelines or a manual that adequately describes the existing system. The State must also identify those aspects of the existing procedure that do not conform to the statutory and regulatory requirements.

2. Evidence that no category of cases is excluded.

To meet this criterion, a State must attest to the fact, by submitting a statement from the State IV-D Director, that its existing procedure is used for all categories of IV-D cases (inter- and intrastate), i.e., TANF, non-TANF and IV-E foster care cases. Instead of a written statement, a State may submit any portion of its procedures or guidelines that shows that all categories of IV-D cases are processed in the existing system.

3.Evidence that implementation of a mandatory procedure would not increase the efficiency and effectiveness of the State's existing procedure.

To meet this criterion, the State's evidence must include an estimate of:

the developmental costs of implementing the additional statutory or regulatory requirements;

the operating costs compared to the collections expected as a result of the additional statutory or regulatory requirements;

the staffing needed to operate the additional statutory or regulatory requirements.

In addition, the State must compare for a fiscal year period the effectiveness of its current program to the effectiveness of the program were it to implement the additional statutory or regulatory provisions, by responding to the following questions, as appropriate. Would the provision increase the State's:

ability to process cases, i.e., the average length of time to take an action in a case?

welfare savings by reducing the number of TANF cases?

number of support orders enforced?

collections (inter- and intrastate)?

Statistical Requirements

A State must fully document the request and define the methodology(ies) used to reach its conclusions. The methodology(ies) must be conceptually sound and supported by data that are reliable and representative. Where estimates are used, the State must identify any assumptions made and/or the sampling approach(es) used. In addition, all sampling must be statistically valid, include adequate sample size and take into account sampling error. All inferences should be made at a 95 percent (or greater) level of significance. In addition, when showing the effectiveness of its current program, data must be gatheredfrom a period of time no earlier than three years prior to the year of the exemption request.

IV.REVOCATION OF EXEMPTION OR DISAPPROVAL OF REQUEST FOR EXTENSION

As stated previously, exemptions are subject to review at any time during the exemption period. If circumstances change, an exemption may be revoked by the Deputy Director of OCSE. The regulations at 45 CFR 302.70(d) state that if an exemption is revoked during the exemption period, or an extension of an exemption is not granted, the State must enact the appropriate laws and implement the mandatory practice by the beginning of the fourth month after the end of the first regular, special, budget or other session of the State's legislature which ends after the date the exemption is revoked or the extension is denied. If no State law is necessary, the State must establish and be using the procedure by the beginning of the fourth month after the date the exemption is revoked or the extension is denied. Any exemption for expedited processes to permit use of judges as presiding officials was obsolete as of December 23, 1994.

V. CERTIFICATION OF IMPLEMENTATION OF MANDATORY PROCEDURES

To ensure that States fully implement each mandatory procedure required under sections 454(20) and 466 of the Act and 45 CFR 302.70, States must submit for approval copies of all required laws, written policies and procedures, and administrative regulations or court rules as attachments to their IV-D State plan page for each mandated procedure.

The ACF Regional Administrator, in consultation with the Regional Chief Counsel, as appropriate, will review each submittal to ensure that all requirements are met. An approval of a State plan preprint page by the ACF Regional Administrator indicates that the State has fully implemented a procedure or has an exemption consistent with Section III of this Action Transmittal.